FDI can be defined as money spends on an investment where the investor can see/hold a tangible good. For example, you can invest directly by purchasing shares of acompany or buying an investment house; these invest are tangible and can be seen.
In a globalised world where commercial and financial barriers are no longer hold FDI has became a keyinstrument for either developed and developing countries in order to boost their economies.
Many countries have reached certain level of economic development which would not be possible without FDIinflows.
As direct benefits generated by FDI we can mention the followings: it creates employment, competition in markets, generates technology transfer, human capital enhancement, enterprisedevelopment and has the potential to bring social and environmental benefits to host economies through the dissemination of good practices and technologies.
In order to get all these benefits countriesaround the world compete to attract foreign direct investment, government policies which help attracting it can be divided in: Fiscal incentives (tax rebate, various export and importincentives, accelerated capital depreciation); financial incentives (direct subsidies, guaranteed export credits, low rates of government insurance and other incentives (natural resources, political andeconomic stability, qualified labor).
Throughout its history, Mexico has been an attractive destination for FDI, which has continued to grow steadily. Today, a wide range of attractions has madeof Mexico a preferred destination for investors and companies seeking to expand their businesses and strengthen their presence in the Americas.
In our country, during the first half of 2010, FDIhas risen to $12.24 billion (us dollars); the leading country of origin was the Netherlands which accounted for $6.96 billion followed by the USA with $3.5 billion and Spain with $960 million.